GREEDY bankers could still sue AIB after the Finance Minister's dramatic U-turn to stop the payments of bonuses.

Bank chiefs admitted today that fresh legal action could still be taken by some of the 2,400 executives who were set to share in a €40m windfall.

But AIB Corporate Services Manager Alan Kelly said: “We would expect that legislation would put the bank in a stronger position to be able to defend any cases that would be taken.”

Finance Minister Brian Lenihan is now set to rush new legislation through the Dail before Christmas, stating: “I don't want the taxpayer exposed to any claim by these individuals.”

The Fianna Fail TD who lifted the lid on scandalous bonuses at AIB in the Herald today told how colleagues called him “mad” but described the blocking of payments as “a defining moment in the banks”.

Backbencher Chris Andrews told the Herald: “A couple of people said I was mad to blow the whistle but it just shows that there is no place for this attitude in Ireland anymore.

“Some bankers seemed to think that they can ride roughshod over ordinary people time and again.”

He added that it could “be the start of a new regime in the banks where they do what they are told, not what they want”.

Minister Lenihan spent nearly a week arguing that he was powerless to stop the bonuses for senior staff but then dramatically threatened to cut off the supply of cash that is keeping the bank afloat.

He has now said that the decision to send a letter compelling AIB not to pay the bonuses took so long because “this is no easy country, legally speaking”.

“It certainly wasn't any political lethargy…” he said.

The minister expressed full confidence in the chief executive and board of AIB.

The Herald first revealed the bonus scandal 10 days ago and Mr Lenihan said: “One lesson that my department has learned is that they don't control the news flow. Somebody dropped the ball in the sense that the information was provided at a very sensitive time.”

Alan Kelly said the bank had been “embarrassed” by the situation and “very relieved” that they will not have to make the payouts.

EARNED

The scandal followed revelations in the Herald that AIB – which is on course to be effectively nationalised by Christmas – paid out almost €60m in bonuses since the start of 2008.

But in a letter to bank chiefs, Mr Lenihan said that the “provision of further State funding to AIB will be conditional, inter alia, on the non-payments of any bonuses, no matter when they may have been earned”.

He said that his intervention was slow because he had to spend the weekend researching such a move and discussing the legalities with the Attorney General.

Reacting today, Mr Kelly said the “bonuses culture” was now over and future payments would be “fair”, “transparent” and “open” to public scrutiny.

- Kevin Doyle